The CHAIRMAN. Is the President aware of the complaints of American businessmen regarding the expropriation of their private investments in Mexico?

Mr. OSBORNE. I am sure he is aware of it.

The CHAIRMAN. Are you aware of it?

Mr. OSBORNE. Yes, sir; there have been no expropriations recently for which compensation was not made. There have been some threats of expropriations.

The CHAIRMAN. Yes. They have been brought to my attention. There have been two or three cases, have there not?

Mr. OSBORNE. Yes, sir.

The CHAIRMAN. It is not formal expropriation; it is, rather, the squeezing them out of business, isn't it?"

Mr. OSBORNE. I am not able to state that.

The CHAIRMAN. It is not directly to this, but I was just wondering why you are so eager to please Mexico when they have shown recently a considerable tendency toward, I think, very arbitrary treatment of American private businessmen in Mexico.

Mr. OSBORNE. I think that is a value judgment, sir.

The CHAIRMAN. You are not aware of it.

Mr. OSBORNE. I don't believe

The CHAIRMAN. What is your responsibility in the State Department?

Mr. OSBORNE. I am officer in charge of Mexican Affairs.
The CHAIRMAN. You are.

by American businessmen?

You are not aware of any complaints

Mr. OSBORNE. Yes, sir; I received complaints very recently.
The CHAIRMAN. Have you done anything about them?

Mr. OSBORNE. Yes, sir.

The CHAIRMAN. What have you done about them?

Mr. OSBORNE. We negotiate with the Mexican Government and in almost every case some satisfactory arrangement is subsequently worked out to the satisfaction of the American businessmen.

The CHAIRMAN. I have two or three cases I had better discuss with you later. There are several businessmen I know who are dissatisfied. Mr. OSBORNE. I would be delighted. I don't believe the cases are completed.

The CHAIRMAN. No; they are not completed. Any other questions?

RELOCATION OF RAILROAD LINE

Senator AIKEN. Yes, what railroads would be flooded out?

Mr. HEWITT. The Southern Pacific.

Senator AIKEN. Is that the main line?

Mr. HEWITT. The main line from New Orleans to El Paso.

Senator AIKEN. That would have to be relocated.

Mr. HEWITT. Yes, 12 miles.

Senator AIKEN. According to the map, if it follows the valley, there would be quite a job in that. What percentage of the $23 million fund would be used in relocating the railroad?

Mr. HEWITT. About $14 million, I believe, sir.
Senator AIKEN. About two-thirds of it.

RECOMMENDATION AGAINST FEDERAL CONSTRUCTION OF A POWER PLANT

The CHAIRMAN. Mr. Hewitt, did the original bill H.R. 8080 provide for the recommendations of the International Boundary and Water Commission? Did that provide, in accordance with your recommendation, that the dam be built with just penstocks and no powerplant?

Mr. HEWITT. Yes, sir; that is correct.

The CHAIRMAN. Well, that bill is more nearly in conformity with your recommendation than the bill that was passed by the House? Mr. HEWITT. That is correct, sir.

The CHAIRMAN. And more nearly in conformity with the recommendations of the Power Commission.

Mr. HEWITT. Yes, sir.

BENEFICIARIES FROM THE WATER

Senator AIKEN. You say that most of the beneficiaries from the water would be small landowners.

Mr. HEWITT. That is correct.

Senator AIKEN. Are there any very large landowners below the proposed site for the dam?

Mr. HEWITT. I would like to ask you what you consider a large landowner?

Senator AIKEN. Anyone who owns 10,000 acres.

Mr. HEWITT. There are no large landowners under this definition. Senator LAUSCHE. Couldn't we get a tabulation of what the holdings are of the large ones?

Mr. HEWITT. I think that could be prepared. I have no idea just what the total number of property owners in the valley may be. If you consider the cities and their population you have, I would say, at least 700,000 people down there.

Senator LAUSCHE. Well, I merely want to say that my judgment would be influenced by the facts with reference to who and how large are the beneficiaries of this irrigation service. That is, if it is the little fellow who is receiving it in an inconsequential way that would require one answer; if there are large holders that are to receive inordinate benefits, that would require another answer.

The CHAIRMAN. Do you have those figures, Mr. Hewitt?

Mr. HEWITT. No, sir; I do not have those figures. I can obtain them.

RELATIONSHIP TO TREATY OF POWERPLANT AND OTHER PROVISIONS

The CHAIRMAN. Mr. Hewitt, was the Texas congressional delegation supporting the bill in the House which was introduced by Mr. Fisher, who is a Congressman from Texas?

Mr. HEWITT. I think so, sir.

Senator AIKEN. I might ask just one more question: Is it customary in building dams at public expense to provide free for the users water that is stored behind these dams? Is it customary in other parts of the United States?

The CHAIRMAN. Does the reclamation service do this?

Mr. HEWITT. It is not the policy of the Bureau of Reclamation. However, this is an international project and I believe as I stated yesterday that had the project been constructed entirely within the United States that the dam that would be proposed would have been a flood control dam.

Senator AIKEN. A retention dam only; no storage.

Mr. HEWITT. Yes, sir. However in view of the fact that this is an international dam and that the treaty requires that the international dam include all purposes it now is proposed partly as a conservation structure.

The CHAIRMAN. Do you mean a dam without the power would be in contravention of the treaty?

Was H.R. 8080 not in accord with the treaty?

Mr. HEWITT. What the treaty says is this: and that is that the two Governments agree to construct jointly through their respective sections of the Commission, first the dams required for the conservation, storage, and regulation of the greatest quantity of annual flow of the river in a way to insure the continuance of existing uses and the development of the greatest number of feasible projects within the limits imposed by the water allotment specified.

We interpret that and so does the Mexican Commissioner to mean that if it is possible to provide conservation and flood control that they must be provided.

Power comes under a separate section of the treaty

The CHAIRMAN. Is H.R. 8080 in accord with the treaty?

Mr. HEWITT. Yes, it is.

The CHAIRMAN. That is what I wanted to know.

DISPOSITION OF FALCON DAM'S POWER AND WATER

Senator AIKEN. How much power is developed at Falcon Dam? Or, rather, how much capacity is installed?

Mr. HEWITT. 31,500 kilowatts. Three generators.

Senator AIKEN. And that is dump power sold at dump prices. Mr. HEWITT. No, sir, it is not. Part of it is sold as dump power and part of it is sold on a $15 per kilowatt installed capacity.

Senator AIKEN. The water is sold to a utility company at the site? Mr. HEWITT. No, sir; the power is sold.

Senator AIKEN. The power is sold.

Mr. HEWITT. By the Department of Interior to the Central Power & Light Co. which is a commercial utility.

Senator HICKENLOOPER. Why not give the power away? Why not just give it to the public?

Mr. HEWITT. We are getting a return to the Federal Treasury. Senator HICKENLOOPER. Wouldn't you get a return to the Federal Treasury out of the water if you sold it?

Mr. HEWITT. Yes, sir.

Senator HICKENLOOPER. I don't see any difference in principle. The CHAIRMAN. Well, gentlemen, we have about covered this. We have other business. Are there other questions of this witness?

Senator HICKENLOOPER. I just want to know, Mr. Hewitt, if I understood you to say that the water from the Falcon Dam is not charged for?

Mr. HEWITT. It is not; no, sir.

Senator HICKENLOOPER. Do you know of any other dams in the United States or any other structures where water is furnished to the public and there is no charge for it?

Mr. HEWITT. I believe there is a condition very similar to that at Hoover Dam.

Senator HICKENLOOPER. I don't know. It seems to me California pays a lot of money for water out of Hoover Dam and others. I just don't know the circumstances.

Mr. HEWITT. I am not fully familiar with it, but I believe
Senator HICKENLOOPER. Hoover Dam is self-liquidating.

Mr. HEWITT. Yes, sir; but I think the power pays for the whole plant.

Senator HICKENLOOPER. They also pay for the water, don't they? Mr. HEWITT. No, they do not, there is no repayment on the water. Senator HICKENLOOPER. How long will it take this dam to silt up? Mr. HEWITT. We know it will not silt up within the pay-out period, a 50-year period.

Senator HICKENLOOPER. How long has Falcon Dam been constructed?

Mr. HEWITT. It went into operation in 1953.

Senator AIKEN. When it silts up what do you do then?

Mr. HEWITT. That is a question at that time, whether you would raise the dam or what you do.

The CHAIRMAN. Gentlemen, I hope we can conclude this unless you have any more questions.

POSSIBLE REVENUE

Mr. HEWITT. I have an approximate answer to Senator Mansfield's question, if we take his assumptions as to average firm capacity of 50,000 kilowatts over the period of the 50 years and pay for it at $15 per kilowatt, 50,000 times $15 or $750,000 for capacity and multiplied by 50 years that would produce a revenue of around $37,500,000. The CHAIRMAN. Thank you very much, Mr. Hewitt and Mr. Osborne.

Mr. HEWITT. It has been a pleasure to appear here.
The CHAIRMAN. We will go into executive session.

(Whereupon, at 11:20 a.m. the committee went into executive session.)

(The following statement was submitted for the record by Senator Ralph Yarborough:)

JUNE 21, 1960.

STATEMENT BY SENATOR RALPH W. YARBOROUGH

Mr. Chairman and members of the committee, I wish to support the passage of the bill H.R. 12263 for final authorization of the construction of the Amistad Dam and Reservoir on the international boundary between the United States and Mexico which is before the Senate Foreign Relations Committee today. This bill is a culmination of the principles formulated in the United States-Mexico Water Treaty of 1945.

Today we plan to build, by joint effort, a new edifice between our two nations of the Western Hemisphere; it is in the form of a giant reservoir which will contain energy supplies in the form of water for hydroelectric power; it is also in the form of a giant water supply for irrigation in Mexico and in the United States; furthermore, by controlling the water supply, major floods below these dams should be eliminated in the United States and Mexico.

Major towns and cities that will gain either directly or indirectly by the construction of the Amistad Dam and a general system of water control on the United States-Mexico boundary are listed in the following table:

It is estimated that about 1.6 million people live within a 200-mile radius and 3.8 million live within a 300-mile radius of the Amistad Reservoir. The city of Del Rio has an estimated population of about 15,000. In addition, the Laughlin Air Force Base is located near Del Rio, Tex., which is about 20 miles from the dam.

Before discussing some of the needs and resources that justify the immediate construction of the Amistad Reservoir, I wish to turn for a moment to the cultural and historical stage which has inspired some fine literature and music along the stretches of the Rio Grande Basin.

The history of North America is filled with legends of adventure stories centering on this international boundary and the Rio Grande Basin. The basin extends about 2,200 miles from the snow-peaked mountains of the Continental Divide in San Juan County of Colorado to the sunshine-filled valleys of orange blossoms, fruits, and vegetables and flowers, where this mighty river empties in the Gulf of Mexico at Brownsville, Tex., and Matamoros, Mexico.

In the story of "Coronado's Children," the exciting story of early Spanish explorers is traced along the Rio Grande Basin, and in the story of "Apache Gold and Yaqui Silver" there are described many nerve tingling accounts of the everpresent search for gold and silver which go beyond the fondest dreams of Ali Baba. These fine stories are now preserved for all time by the picturesque writing of J. Frank Dobie in his stories of the American Southwest.

Also, I should like to mention the work of the distinguished writer and historian, Dr. Walter Prescott Webb. He is the author of numerous publications. In particular in connection with this area of the United States, I wish to mention his books entitled "The Great Plains," the "Great Frontier," and "The Story of the Texas Rangers."

In these stories by Dr. Webb, which have now been dramatized for American audiences, the magnificent legacies of this Rio Grande River country have been brought to life in our current television programs. These picturesque scenes and colorful stories help us to realize the great future potential that this part of the continent holds for all Americans.

As the Pan American Highway reaches completion, we hope all of our Latin American and South American friends will be able to enjoy the proposed recreational facilities in the area of the Rio Grande River Basin. For there we find 708,000 acres in the Big Bend National Park of the Rio Grande River and a proposed Padre Island National Seashore Area extending in a proposed seashore highway for 88 miles on an island which connects at the mouth of the Rio Grande River at Brownsville, Tex., to Padre Island, which is located between Brownsville and Corpus Christi for a distance of about 117 miles.

Rio Grande Basin roads may eventually be linked into a 2,200 mile scenic highway of American States and this could connect with the Pan American Highway system at the U.S. border.

Turning back to the immediate needs and resources which justify the authorization for construction of Amistad Reservoir on the international boundary near Del Rio, Tex., and Ciudad Acuña, Mexico, the most important aspect of the bill before the committee is the protection against the devastating floods which are so costly to our people and our Government as well as to our good neighbor in Mexico. For example, a great flood threatened the entire Rio Grande Valley in 1954 and 1958. A few more feet of flood would have caused severe damage to the entire area and partially destroyed the city of Brownsville.

On the U.S. side flood damages and losses on the Rio Grande waters in 1958 were estimated at $42,500,000. This amount of loss on one flood alone corresponds to almost 90 percent of an estimated $49 million of the total cost of the project. These heavy losses of irrigation waters and the severe flood damages on the U.S. side of the river as well as on the Mexico side in 1958 were due to the lack of additional conservation and flood control upstream from the Falcon Dam.